The recent announcement that Amazon is acquiring Whole Foods Market has rocked the business world, as pundits, retailers and grocery execs struggle to wrap their heads around what it all means. Darrell K. Rigby, head of Bain & Company’s global innovation and retail practices, spelled it out in the Harvard Business Review: “From today onward, the only viable retail strategy is to try to advance and merge digital and physical capabilities faster and better than Amazon does.” In other words, retail is long past overdue for a true digital transformation.
Neil Blumenthal, Co-CEO of Warby Parker, told The Wall Street Journal back in January: “I don’t think retail is dead. Mediocre retail experiences are dead.” Elevating the retail experience to meet the demands of today’s on-demand and omnichannel consumer, however, requires understanding the digital and physical feedback that tells you what they want. In other words, it takes data—and lots of it.
In her Internet Trends 2017 report, analyst and author Mary Meeker spotlighted men’s shirt retailer Untuckit, which creates a synergistic digital / physical feedback loop between advertising, in-store and online interactions. The company reports a more than 2.5x increase in website visits from 2015-2016. Meeker also pointed to women’s professional-wear retailer MM.LaFleur, which is combining its data-driven, online styling / e-commerce site with a new high-touch, appointment-based, brick-and-mortar experience. Presumably, an individual’s online data is leveraged for the in-store personal styling session and vice versa. According to Washington Post, MM.LaFleur has experienced 300% year-over-year growth since 2013.
Both Untuckit and MM.LaFleur are clearly innovators, yet they lack a dedicated mobile app solution. That means they’re missing out on leveraging the vast amount of uniquely contextual user insights a mobile portfolio can deliver. This “daily digital trail” could give them a more detailed and personal understanding of their best customers than ever, enabling more relevant engagement at every touchpoint—whether it’s online, in person or via mobile app.
The fourth-annual CEO Viewpoint 2017: The Transformation of Retail survey from PwC and JDA Software Group, Inc. indicates that 85% of global retail executives said they are investing in mobile-enabled applications (or plan to) over the next 12 months. 86% reported current or planned investments in big data. And overall, the survey found that a digital transformation strategy is the #1 priority for 2017.
Many U.S. retail execs…still have not defined or begun implementing digital transformation strategies, and some of them appear to be really struggling.” – Retail Dive
Yet, Retail Dive’s analysis of CEO Viewpoint 2017 noted that “The more interesting thing is that many U.S. retail execs, according to the survey, still have not defined or begun implementing digital transformation strategies, and some of them appear to be really struggling.” Digital transformation, as Retail Dive sees it, is about getting the organization on the right footing to compete at the highest level. This seismic shift needs to happen before adopting new technologies or ingesting huge new volumes of data. All the new toys in the world will do retailers absolutely no good if they’re not positioned to take full advantage of them.